USING PAYROLL TAX VARIATION TO UNPACK THE BLACK BOX OF FIRM-LEVEL PRODUCTION

• 成果类型: Article
• 署名作者: Benzarti, Youssef; Harju, Jarkko
• 署名单位: University of California System; University of California Santa Barbara; Tampere University; VATT Institute for Economic Research
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvab010
• 发表日期: 2021
• 页码: 2737-2764
• 关键词: biased technological-change; skill complementarity; job polarization; immigration; demand; GROWTH

摘要

This paper uses quasi-experimental variation in payroll tax rates in Finland to investigate how firms use their input factors. We find that higher payroll tax rates lead to large employment responses and have no effects on employee-level earnings. As payroll taxes increase, firms substitute away from low-skilled, routine, and manual workers. Higher firm-level payroll tax rates also slightly decrease the total output of firms. Our results imply that firm-level production and input factor choices are clearly affected by payroll taxes.